For Employers, the Time to Talk About Medicaid Changes with Employees is Now
May 17, 2023
The COVID-19 public health emergency has officially ended, and so has emergency Medicaid eligibility for millions. Here’s how to help employees navigate health insurance changes.
The U.S. Department of Health and Human Services is winding down its emergency stance it had in place surrounding COVID-19. Though the disease has been slowly fading into the background for many people, this change will create numerous sudden effects, some of which will require action and thoughtful communication by employers.
Employees of all types could be in for unwelcome surprise changes in coverage and expenses over the next year. Employers—even those in high-paying industries that have never had to consider Medicaid before—need to communicate now with their employees about coming changes to Medicaid coverage to avoid misplaced blowback and possible staffing disruptions.
Congress passed the Families First Coronavirus Response Act (FFCRA) at the start of the pandemic. The Act included requirements for Medicaid programs, which are administered by states to provide a healthcare safety net for those with limited income.
One requirement was to keep people continuously covered until the end of the COVID-19 public health emergency. If an individual qualified for Medicaid at any point over the last three years, even for a single month, they entered the Medicaid rolls and haven’t left. With the mass economic disruptions the pandemic created, a lot of people qualified for Medicaid—including many for the first time.
But that public health emergency ended on May 11, 2023, and individuals’ eligibility for Medicaid could change.
Medicaid programs will “unwind” their rolls and transition back to their regular processes of determining whether individuals qualify for coverage based on factors such as their income and life circumstances. Those factors, as well as when and how the unwinding happens, vary by state, but KFF estimates that between 5 million and 14 million Americans will be removed from Medicaid rolls during the next year.
My company offers health benefits. Why do Medicaid changes matter to my employees?
Medicaid is a “payer of last resort.” If an individual has other insurance coverage, such as through an employer, those policies must pay for healthcare expenses as usual first. Medicaid then picks up any remaining costs. Because Medicaid is designed for those with low incomes who cannot afford even moderate out-of-pocket deductible costs, its coverage is often more generous than employer-provided coverage.
Employees who have employer-provided health benefits and continue to receive Medicaid because of FFCRA may be unaware that Medicaid has been covering expenses such as co-pays and deductibles. These employees could see their medical expenses rise—sometimes by a lot.
Medicaid can even cover health insurance premiums, which can be a substantial cost. Employer-sponsored plans often split the expense of monthly premiums with individual employees. If an employee is still on Medicaid rolls through FFCRA, that cost has likely been picked up, in part or in full, since they began receiving health benefits from their employer. When Medicaid coverage ends, employees may see a sudden and drastic reduction in their take-home pay.
Employees who don’t understand when, how and why these changes are taking place could soon direct their frustration at their company. Thoughtful, preemptive internal communication is the key to considering and supporting employee well-being.
My company doesn’t offer health benefits. Why do Medicaid changes matter to my employees?
Workforces may be heavily populated with individuals who have experienced Medicaid’s processes only in the COVID era. They may be unaware of the regular re-enrollment processes they will now need to follow to maintain their benefits.
An employee who was familiar with standard re-enrollment processes before the public health emergency could still be caught off guard by their state’s unique approach to unwinding Medicaid rolls. An employee whose contact information is out of date may not be receiving critical information from Medicaid about the changes. Because the timing and processes of these changes will vary greatly across the country, companies with an interstate footprint will need to tailor their communication based on the employee’s location.
In addition to preparing employees for re-enrollment processes, businesses should get ready for possible staffing disruptions. Because many safety-net programs do not gradually decrease benefits as an individual’s financial situation gradually improves, people are often faced with counterintuitive choices, such as needing to reduce their earnings to preserve literally life-saving benefits.
Employees in these difficult circumstances have been sheltered from these hard decisions since the start of the pandemic. With Medicaid unwinding—again, in myriad ways and timelines—companies need to anticipate when and where there may be rapid changes in available staffing. Or, better yet, look to how they can help employees maintain employment and government assistance.
Helping employees navigate the Medicaid changes shows you value them
Medicaid’s eligibility changes will be complicated for both employees and employers, but many organizations have benefits departments. That makes them better positioned to begin making sense of the process for their employees, state by state. Cascading critical information to those who need it goes a long way toward supporting a positive employee experience. Showing employees you care for their financial well-being also shows you value their contributions to your business.
Consider which employee groups may be most at risk of temporarily losing coverage, and provide them with additional support. A 2022 analysis showed that groups with limited English proficiency or disabilities were most likely to have difficulties accessing and acting on the needed information.
With quick preparation and communication, the ending of one emergency need not create another.
About the author
Nate West is a senior vice president and co-lead of the Southeast Health Practice Group, where he runs award-winning strategic communication campaigns for organizations across the health industry, including those in the burgeoning EcoHealth space.